End-of-Year Planning: Key Steps to Take This Fall

As we turn the calendar to October, it’s a good reminder that the end of the year is fast approaching, and now is the ideal time to review your financial picture and take advantage of planning opportunities before December 31. This year is especially important with new tax law changes under the One Big Beautiful Bill (OBBB). By being proactive now, you can reduce taxes, fine-tune your investments, and set yourself up for a stronger start to the new year. Here are some key areas to consider.

1. Review Your Tax Situation

Taxes shouldn’t be a surprise in April. Looking at your income, deductions, and potential liabilities now gives you time to adjust. Consider:

  • Capital Gains and Losses: If you’ve sold investments at a gain this year, you may want to harvest losses in other positions to offset them. At Northstar, we are focused on this strategy throughout the year; however, if you have investments held outside of Northstar’s view, this is an important task to consider.

  • Withholding and Estimated Payments: Make sure you’re on track to avoid underpayment penalties. Adjusting withholding now is easier than scrambling in December.

  • Charitable Giving: Donating appreciated securities instead of cash can reduce both income taxes and capital gains exposure. Note: Starting in 2026, non-itemizers will receive a small deduction for gifts, while itemizers will face a 0.5% AGI floor. Plan your timing carefully.

  • Higher Standard Deductions: OBBB made the doubled standard deduction permanent—$15,750 for singles and $31,500 for married couples (2025). For seniors 65-plus, there’s an extra $6,000 per eligible taxpayer through 2028, although this extra benefit begins to phase out after an income threshold ($75,000 for single filers, $150,000 for married couples filing jointly).

At Northstar, we can help coordinate with your CPA to identify the strategies that make the most sense for your situation.

2. Retirement Accounts

October is a great time to check in on your retirement plan contributions and review long-term tax-saving strategies:

  • 401(k), 403(b), or 457 Plans: The 2025 contribution limit is $23,500, plus an additional $7,500 if you’re age 50 or older. Make sure you’re on track to max out your benefit, if possible.

  • IRAs and Roth IRAs: You technically have until next April to contribute, but planning now ensures you don’t miss the opportunity.

  • SEP or SIMPLE IRAs: Business owners should review earnings and contribution strategies before year-end to maximize deductions.

  • Required Minimum Distributions (RMDs): If you’re 73-plus (or inherited an IRA subject to RMD rules), distributions must be taken by year-end. Consider qualified charitable distributions (QCDs) to satisfy RMDs and reduce taxable income.

  • Roth Conversions: Lower brackets (locked in by OBBB) and bigger deductions may make Roth conversions more attractive.

3. Review Your Investment Portfolio

The end of the year is a natural checkpoint for your investments. Market conditions shift, and so does your personal financial picture. Ask yourself:

  • Has your risk tolerance changed?

  • Are you overweighted in any particular asset class?

  • Does your portfolio still align with your goals?

  • Does the higher SALT deduction affect how you hold certain assets in taxable accounts if you live in a state with high state taxes?

Rebalancing before year-end can lock in gains, realign your risk exposure, and potentially improve long-term returns.

4. Healthcare and Benefits

  • Medicare Open Enrollment: Runs Oct. 15 to Dec. 7. Review coverage, especially drug formularies.

  • FSAs and Benefits: Use flexible spending account balances before year-end. Many plans have a “use it or lose it” feature.

  • Health Savings Accounts (HSAs): If eligible, maximize contributions: $4,300 single, $8,650 family, plus $1,000 catch-up (2025).

5. Consider Gifting Strategies

For those looking to transfer wealth efficiently, the annual gift tax exclusion allows you to give up to $18,000 per recipient in 2025 without reducing your lifetime exemption. Making gifts before year-end can help move assets out of your estate while benefiting loved ones.

Charitably inclined families may also consider donor-advised funds (DAFs). Contributing before December 31 secures the deduction for this year, even if you make grants to charities later.

6. Review Your Insurance and Estate Plans

Life changes—marriages, births, divorces, or even simply getting older—can affect insurance needs and estate planning goals. Use this season to:

  • Confirm beneficiary designations are up to date.

  • Review your will, trusts, and powers of attorney to ensure they still reflect your wishes.

  • Assess whether your life or long-term care insurance remains adequate.

These updates are easy to overlook but can make a major difference when families need them most.

7. Don’t Forget Your Personal Goals

Financial planning isn’t just about numbers. It’s also about supporting your lifestyle and aspirations. Consider:

  • Do you want to travel more next year?

  • Are there home improvements you’ve been putting off?

  • Are you saving for a child’s or grandchild’s education?

Setting intentions now helps align your finances with what truly matters most to you.

Final Thoughts

October is the sweet spot for end-of-year planning. You have enough time to take meaningful action, but not so much that it’s easy to procrastinate. By reviewing taxes, retirement contributions, investment allocations, insurance, and estate plans now, you can finish 2025 with confidence and peace of mind.

At Northstar Financial Planners, we work closely with you—and your CPA, when appropriate—to guide you through these decisions and make sure nothing falls through the cracks. If you’d like a personalized review, please reach out soon so we can make the most of this year’s changes.